Patient Driven Payment Model - Background & Finalized Changes to the Skilled Nursing Facility (SNF) Prospective Payment System (PPS) - CMS
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Patient Driven Payment Model Background & Finalized Changes to the Skilled Nursing Facility (SNF) Prospective Payment System (PPS)
Disclaimer
This presentation was prepared as a tool to assist providers and is not intended to
grant rights or impose obligations. Although every reasonable effort has been made
to assure the accuracy of the information within these pages, the ultimate
responsibility for the correct submission of claims and responses to any remittance
advice lies with the provider of services.
This publication is a general summary that explains certain aspects of the Medicare
Program, but is not a legal document. The official Medicare Program provisions are
contained in the relevant laws, regulations, and rulings. Medicare policy changes
frequently, and links to the source documents have been provided within the
document for your reference.
The Centers for Medicare & Medicaid Services (CMS) employees, agents, and staff
make no representation, warranty, or guarantee that this compilation of Medicare
information is error-free and will bear no responsibility or liability for the results or
consequences its use.
2Project Overview
• Issues with the current case-mix model, the Resource Utilization
Groups, Version IV (RUG-IV), have been identified by CMS, OIG,
MedPAC, the media, and others
– Therapy payments under the SNF PPS are based primarily on the
amount of therapy provided to a patient, regardless of the
patient’s unique characteristics, needs or goals
• The Patient Driven Payment Model (PDPM) represents a marked
improvement over the RUG-IV model for the following reasons:
– Improves payment accuracy and appropriateness by focusing on the
patient, rather than the volume of services provided
– Significantly reduces administrative burden on providers
– Improves SNF payments to currently underserved beneficiaries
without increasing total Medicare payments
3RUG-IV Components
• RUG-IV consists of two case-mix adjusted components:
– Therapy: Based on volume of services provided
– Nursing: The nursing case-mix index (CMI) does not currently reflect
specific variations in non-therapy ancillary utilization
4PDPM Components
• PDPM consists of five case-mix adjusted components, all based on data-
driven, stakeholder-vetted patient characteristics:
– Physical Therapy (PT)
– Occupational Therapy (OT)
– Speech Language Pathology (SLP)
– Non-Therapy Ancillary (NTA)
– Nursing
• PDPM also includes a “variable per diem (VPD) adjustment” that adjusts
the per diem rate over the course of the stay
5PDPM Snapshot
6RUG-IV vs. PDPM
• While RUG-IV (left) reduces everything about a patient to a single, typically
volume-driven, case-mix group, PDPM (right) focuses on the unique,
individualized needs, characteristics, and goals of each patient
7Effect of PDPM
• By addressing each individual patient’s unique needs independently,
PDPM improves payment accuracy and encourages a more patient-driven
care model
8PDPM Patient Classification
• Under PDPM, each patient is classified into a group for each of the five
case-mix adjusted components: PT, OT, SLP, NTA, and Nursing
• Each component utilizes different criteria as the basis for patient
classification:
– PT: Clinical Category, Functional Score
– OT: Clinical Category, Functional Score
– SLP: Presence of Acute Neurologic Condition, SLP-related
Comorbidity or Cognitive Impairment, Mechanically-altered Diet,
Swallowing Disorder
– NTA: NTA Comorbidity Score
– Nursing: Same characteristics as under RUG-IV
9PT & OT Components: RUG-IV & PDPM
• Under RUG-IV, the number of PT, OT, and SLP therapy treatment minutes
are combined for a total number of treatment minutes that is used to
classify a given patient into a given therapy RUG
• Under PDPM, patient characteristics will be used to predict the therapy
costs associated with a given patient, rather than rely on service use
• For the PT & OT components, two classifications are used:
– Clinical Category
– Functional Status
10PDPM Clinical Categories
• SNF patients are first classified into a clinical category based on the
primary diagnosis for the SNF stay
• ICD-10-CM codes, coded on the MDS in Item I0020B, are mapped to a
PDPM clinical category
– Clinical classification may be adjusted by a surgical procedure that
occurred during the prior inpatient stay, as coded in Section J
– ICD-10 mapping available at: https://www.cms.gov/Medicare/Medicare-
Fee-for-Service-Payment/SNFPPS/PDPM.html
PDPM Clinical Categories
Major Joint Replacement or Spinal Surgery Cancer
Non-Surgical Orthopedic/Musculoskeletal Pulmonary
Orthopedic Surgery (Except Major Joint
Cardiovascular and Coagulations
Replacement or Spinal Surgery)
Acute Infections Acute Neurologic
Medical Management Non-Orthopedic Surgery
11PT & OT Clinical Categories
• Based on data showing similar costs among certain clinical categories, the
PT & OT components use four collapsed clinical categories for patient
classification.
PDPM Clinical Categories PT & OT Clinical Categories
Major Joint Replacement or Spinal Surgery Major Joint Replacement or Spinal Surgery
Acute Neurologic
Non-Orthopedic Surgery & Acute Neurologic
Non-Orthopedic Surgery
Non-Surgical Orthopedic/Musculoskeletal
Orthopedic Surgery (Except Major Joint Other Orthopedic
Replacement or Spinal Surgery)
Medical Management
Cancer
Pulmonary Medical Management
Cardiovascular & Coagulations
Acute Infections
12PT & OT Functional Score
• PDPM advances CMS’ goal of using standardized assessment items
across payment settings, by using items in Section GG of the MDS as the
basis for patient functional assessments.
• The functional score for the PT & OT components is calculated as the sum
of the scores on ten Section GG items:
– Two bed mobility items
– Three transfer items
– One eating item
– One toileting item
– One oral hygiene item
– Two walking items
13PT & OT Functional Score: GG Items
• Section GG items included in the PT & OT functional score
Section GG Item Functional Score Range
GG0130A1 – Self-care: Eating 0–4
GG0130B1 – Self-care: Oral Hygiene 0–4
GG0130C1 – Self-care: Toileting Hygiene 0–4
GG0170B1 – Mobility: Sit to Lying 0–4
GG0170C1 – Mobility: Lying to Sitting on side of bed (average of 2 items)
GG0170D1 – Mobility: Sit to Stand
0–4
GG0170E1 – Mobility: Chair/bed-to-chair transfer
(average of 3 items)
GG0170F1 – Mobility: Toilet Transfer
GG0170J1 – Mobility: Walk 50 feet with 2 turns 0–4
GG0170K1 – Mobility: Walk 150 feet (average of 2 items)
14Nursing Functional Score: GG Items
• Section GG items included in the Nursing functional score
Section GG Item Functional Score Range
GG0130A1 – Self-care: Eating 0–4
GG0130C1 – Self-care: Toileting Hygiene 0–4
GG0170B1 – Mobility: Sit to Lying 0–4
GG0170C1 – Mobility: Lying to Sitting on side of bed (average of 2 items)
GG0170D1 – Mobility: Sit to Stand
0–4
GG0170E1 – Mobility: Chair/bed-to-chair transfer
(average of 3 items)
GG0170F1 – Mobility: Toilet Transfer
15Functional Score: Item Response Crosswalk
• PT & OT and Nursing Functional Score Construction (Non-walking Items)
Item Response Score
05, 06 – Set-up Assistance, Independent 4
04 – Supervision or touching assistance 3
03 – Partial/Moderate assistance 2
02 – Substantial/Maximal assistance 1
01, 07, 09, 10, 88, missing – Dependent, Refused, Not applicable, Not attempted due to
0
environmental limitations, Not Attempted due to medical condition or safety concerns
• PT & OT Functional Score Construction (Walking Items)
Item Response Score
05, 06 – Set-up Assistance, Independent 4
04 – Supervision or touching assistance 3
03 – Partial/Moderate assistance 2
02 – Substantial/Maximal assistance 1
01, 07, 09, 10, 88 – Dependent, Refused, Not applicable, Not attempted due to
environmental limitations, Not Attempted due to medical condition or safety concerns, 0
Resident Cannot Walk (Coded based on response to GG0170I1)
16RUG-IV & PDPM Function Score Differences
• Notable differences between G and GG scoring methodologies:
– Reverse scoring methodology:
• Under Section G, increasing score means increasing dependence
• Under Section GG, increasing score means increasing
independence
– Non-linear relationship to payment:
• Under RUG-IV, increasing dependence, within a given RUG
category, translates to higher payment
• Under PDPM, there is not a direct relationship between increasing
dependence and increasing payment
– Example: For the PT & OT component, payment for three
clinical categories is lower for the most and least dependent
patients (who are less likely to require high therapy amounts of
therapy), compared to those in between (who are more likely to
require high amounts of therapy)
17PT & OT Components: Payment Groups
PT & OT PT & OT
Clinical Category PT CMI OT CMI
Function Score Case Mix Group
Major Joint Replacement or Spinal Surgery 0-5 TA 1.53 1.49
Major Joint Replacement or Spinal Surgery 6-9 TB 1.69 1.63
Major Joint Replacement or Spinal Surgery 10-23 TC 1.88 1.68
Major Joint Replacement or Spinal Surgery 24 TD 1.92 1.53
Other Orthopedic 0-5 TE 1.42 1.41
Other Orthopedic 6-9 TF 1.61 1.59
Other Orthopedic 10-23 TG 1.67 1.64
Other Orthopedic 24 TH 1.16 1.15
Medical Management 0-5 TI 1.13 1.17
Medical Management 6-9 TJ 1.42 1.44
Medical Management 10-23 TK 1.52 1.54
Medical Management 24 TL 1.09 1.11
Non-Orthopedic Surgery and Acute Neurologic 0-5 TM 1.27 1.30
Non-Orthopedic Surgery and Acute Neurologic 6-9 TN 1.48 1.49
Non-Orthopedic Surgery and Acute Neurologic 10-23 TO 1.55 1.55
Non-Orthopedic Surgery and Acute Neurologic 24 TP 1.08 1.09
18SLP Component
• For the SLP component, PDPM uses a number of different patient
characteristics that were predictive of increased SLP costs:
– Acute Neurologic clinical classification
– Certain SLP-related comorbidities
– Presence of cognitive impairment
– Use of a mechanically-altered diet
– Presence of swallowing disorder
19SLP Comorbidities
• Twelve SLP comorbidities were identified as predictive of higher SLP costs
– Conditions and services combined into a single SLP-related
comorbidity flag
– Patient qualifies if any of the conditions/services is present
SLP Comorbidities
Aphasia Laryngeal Cancer
CVA,TIA, or Stroke Apraxia
Hemiplegia or Hemiparesis Dysphagia
Traumatic Brain Injury ALS
Tracheostomy (while Resident) Oral Cancers
Ventilator (while Resident) Speech & Language Deficits
20PDPM Cognitive Scoring
• Under RUG-IV, a patient’s cognitive status is assessed using the Brief
Interview for Mental Status (BIMS)
– In cases where the BIMS cannot be completed, providers are required
to perform a staff assessment for mental status
– The Cognitive Performance Scale (CPS) is then used to score the
patient’s cognitive status based on the results of the staff assessment
• Under PDPM, a patient’s cognitive status is assessed in exactly the same
way as under RUG-IV (i.e., via the BIMS or staff assessment)
– Scoring the patient’s cognitive status, for purposes of classification, is
based on the Cognitive Function Scale (CFS), which is able to provide
consistent scoring across the BIMS and staff assessment
21PDPM Cognitive Score: Methodology
• PDPM Cognitive Measure Classification Methodology
Cognitive Level BIMS Score CPS Score
Cognitively Intact 13 – 15 0
Mildly Impaired 8 – 12 1–2
Moderately Impaired 0–7 3–4
Severely Impaired - 5–6
22SLP Component: Payment Groups
Presence of Acute Neurologic Mechanically Altered
SLP Case SLP Case Mix
Condition, SLP Related Comorbidity, Diet or Swallowing
Mix Group Index
or Cognitive Impairment Disorder
None Neither SA 0.68
None Either SB 1.82
None Both SC 2.66
Any one Neither SD 1.46
Any one Either SE 2.33
Any one Both SF 2.97
Any two Neither SG 2.04
Any two Either SH 2.85
Any two Both SI 3.51
All three Neither SJ 2.98
All three Either SK 3.69
All three Both SL 4.19
23NTA Component
• NTA classification is based on the presence of certain comorbidities or
use of certain extensive services
• We considered various options to incorporate comorbidities into payment.
– Total number of comorbidities is linked to NTA costs, but a simple
count of conditions overlooks differences in relative costliness
– A tier system accounts for differences in relative costliness, but does
not account for the number of comorbidities
• Comorbidity score is a weighted count of comorbidities
– Comorbidities associated with high increases in NTA costs grouped
into various point tiers
– Points assigned for each additional comorbidity present, with more
points awarded for higher-cost tiers
24NTA Component: Comorbidity Coding
• Comorbidities and extensive services for NTA classification are derived
from a variety of MDS sources, with some comorbidities identified by ICD-
10-CM codes reported in Item I8000
• A mapping between ICD-10-CM codes and NTA comorbidities used for
NTA classification is available on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/SNFPPS/PDPM.html
• One comorbidity (HIV/AIDS) is reported on the SNF claim, in the same
manner as under RUG-IV
– The patient’s NTA classification will be adjusted by the appropriate
number of points for this condition by the CMS PRICER for patients
with HIV/AIDS
25NTA Component: Condition Listing (1)
Condition/Extensive Service Source Points
HIV/AIDS SNF Claim 8
MDS Item K0510A2,
Parenteral IV Feeding: Level High 7
K0710A2
Special Treatments/Programs: Intravenous Medication Post-admit
MDS Item O0100H2 5
Code
Special Treatments/Programs: Ventilator or Respirator Post-admit
MDS Item O0100F2 4
Code
MDS Item K0510A2,
Parenteral IV feeding: Level Low 3
K0710A2, K0710B2
Lung Transplant Status MDS Item I8000 3
Special Treatments/Programs: Transfusion Post-admit Code MDS Item O0100I2 2
Major Organ Transplant Status, Except Lung MDS Item I8000 2
Multiple Sclerosis Code MDS Item I5200 2
Opportunistic Infections MDS Item I8000 2
Asthma COPD Chronic Lung Disease Code MDS Item I6200 2
Bone/Joint/Muscle Infections/Necrosis - Except Aseptic Necrosis of
MDS Item I8000 2
Bone
Chronic Myeloid Leukemia MDS Item I8000 2
Wound Infection Code MDS Item I2500 2
Diabetes Mellitus (DM) Code MDS Item I2900 2
26NTA Component: Condition Listing (2)
Condition/Extensive Service Source Points
Endocarditis MDS Item I8000 1
Immune Disorders MDS Item I8000 1
End-Stage Liver Disease MDS Item I8000 1
Other Foot Skin Problems: Diabetic Foot Ulcer Code MDS Item M1040B 1
Narcolepsy and Cataplexy MDS Item I8000 1
Cystic Fibrosis MDS Item I8000 1
Special Treatments/Programs: Tracheostomy Care Post-admit Code MDS Item O0100E2 1
Multi-Drug Resistant Organism (MDRO) Code MDS Item I1700 1
Special Treatments/Programs: Isolation Post-admit Code MDS Item O0100M2 1
Specified Hereditary Metabolic/Immune Disorders MDS Item I8000 1
Morbid Obesity MDS Item I8000 1
Special Treatments/Programs: Radiation Post-admit Code MDS Item O0100B2 1
Highest Stage of Unhealed Pressure Ulcer - Stage 4 MDS Item M0300D1 1
Psoriatic Arthropathy and Systemic Sclerosis MDS Item I8000 1
Chronic Pancreatitis MDS Item I8000 1
Proliferative Diabetic Retinopathy and Vitreous Hemorrhage MDS Item I8000 1
27NTA Component: Condition Listing (3)
Condition/Extensive Service Source Points
Other Foot Skin Problems: Foot Infection Code, Other Open Lesion on MDS Item M1040A,
1
Foot Code, Except Diabetic Foot Ulcer Code M1040B, M1040C
Complications of Specified Implanted Device or Graft MDS Item I8000 1
Bladder and Bowel Appliances: Intermittent Catheterization MDS Item H0100D 1
Inflammatory Bowel Disease MDS Item I1300 1
Aseptic Necrosis of Bone MDS Item I8000 1
Special Treatments/Programs: Suctioning Post-admit Code MDS Item O0100D2 1
Cardio-Respiratory Failure and Shock MDS Item I8000 1
Myelodysplastic Syndromes and Myelofibrosis MDS Item I8000 1
Systemic Lupus Erythematosus, Other Connective Tissue Disorders,
MDS Item I8000 1
and Inflammatory Spondylopathies
Diabetic Retinopathy - Except Proliferative Diabetic Retinopathy and
MDS Item I8000 1
Vitreous Hemorrhage
Nutritional Approaches While a Resident: Feeding Tube MDS Item K0510B2 1
Severe Skin Burn or Condition MDS Item I8000 1
Intractable Epilepsy MDS Item I8000 1
Malnutrition Code MDS Item I5600 1
28NTA Component: Condition Listing (4)
Condition/Extensive Service Source Points
Disorders of Immunity - Except : RxCC97: Immune Disorders MDS Item I8000 1
Cirrhosis of Liver MDS Item I8000 1
Bladder and Bowel Appliances: Ostomy MDS Item H0100C 1
Respiratory Arrest MDS Item I8000 1
Pulmonary Fibrosis and Other Chronic Lung Disorders MDS Item I8000 1
29NTA Component: Payment Groups
NTA Score Range NTA Case Mix Group NTA Case Mix Index
12+ NA 3.25
9-11 NB 2.53
6-8 NC 1.85
3-5 ND 1.34
1-2 NE 0.96
0 NF 0.72
30Nursing Component
• RUG-IV classifies patients into a therapy RUG, based on how much
therapy the patient receives, and a non-therapy RUG, based on certain
patient characteristics.
– Only one of these RUGs is used for payment purposes
– Therapy RUGs are used to bill for over 90% of Part A days
• Therapy RUGs use a consistent nursing case-mix adjustment, which
obscures clinically meaningful differences in nursing characteristics
between patients in the same therapy RUG.
• PDPM utilizes the same basic nursing classification structure as RUG-IV,
with certain modifications.
– Function score based on Section GG of the MDS 3.0
– Collapsed functional groups, reducing the number of nursing groups
from 43 to 25
31Nursing Component: Payment Groups (1)
RUG-IV Restorative
Extensive Function
Nursing Clinical Conditions Depression Nursing CMG CMI
Services Score
RUG Services
Tracheostomy &
ES3 0-14 ES3 4.04
Ventilator
Tracheostomy or
ES2 0-14 ES2 3.06
Ventilator
ES1 Infection Isolation 0-14 ES1 2.91
Serious medical conditions e.g.
HE2/HD2 comatose, septicemia, Yes 0-5 HDE2 2.39
respiratory therapy
Serious medical conditions e.g.
HE1/HD1 comatose, septicemia, No 0-5 HDE1 1.99
respiratory therapy
Serious medical conditions e.g.
HC2/HB2 comatose, septicemia, Yes 6-14 HBC2 2.23
respiratory therapy
Serious medical conditions e.g.
HC1/HB1 comatose, septicemia, No 6-14 HBC1 1.85
respiratory therapy
32Nursing Component: Payment Groups (2)
RUG-IV Restorative
Extensive Function
Nursing Clinical Conditions Depression Nursing CMG CMI
Services Score
RUG Services
Serious medical conditions e.g. radiation
LE2/LD2 Yes 0-5 LDE2 2.07
therapy or dialysis
Serious medical conditions e.g. radiation
LE1/LD1 No 0-5 LDE1 1.72
therapy or dialysis
Serious medical conditions e.g. radiation
LC2/LB2 Yes 6-14 LBC2 1.71
therapy or dialysis
Serious medical conditions e.g. radiation
LC1/LB1 No 6-14 LBC1 1.43
therapy or dialysis
Conditions requiring complex medical
CE2/CD2 care e.g. pneumonia, surgical wounds, Yes 0-5 CDE2 1.86
burns
Conditions requiring complex medical
CE1/CD1 care e.g. pneumonia, surgical wounds, No 0-5 CDE1 1.62
burns
Conditions requiring complex medical
CC2/CB2 care e.g. pneumonia, surgical wounds, Yes 6-14 CBC2 1.54
burns
Conditions requiring complex medical
CA2 care e.g. pneumonia, surgical wounds, Yes 15-16 CA2 1.08
burns
33Nursing Component: Payment Groups (3)
RUG-IV Restorative
Extensive Function
Nursing Clinical Conditions Depression Nursing CMG CMI
Services Score
RUG Services
Conditions requiring complex medical
CC1/CB1 care e.g. pneumonia, surgical wounds, No 6-14 CBC1 1.34
burns
Conditions requiring complex medical
CA1 care e.g. pneumonia, surgical wounds, No 15-16 CA1 0.94
burns
BB2/BA2 Behavioral or cognitive symptoms 2 or more 11-16 BAB2 1.04
BB1/BA1 Behavioral or cognitive symptoms 0-1 11-16 BAB1 0.99
Assistance with daily living and general
PE2/PD2 2 or more 0-5 PDE2 1.57
supervision
Assistance with daily living and general
PE1/PD1 0-1 0-5 PDE1 1.47
supervision
Assistance with daily living and general
PC2/PB2 2 or more 6-14 PBC2 1.21
supervision
Assistance with daily living and general
PA2 2 or more 15-16 PA2 0.7
supervision
Assistance with daily living and general
PC1/PB1 0-1 6-14 PBC1 1.13
supervision
Assistance with daily living and general
PA1 0-1 15-16 PA1 0.66
supervision
34Variable Per Diem Adjustment
• The Social Security Act requires the SNF PPS to pay on a per-diem basis.
• Constant per diem rates do not accurately track changes in resource
utilization throughout the stay, and may allocate too few resources for
providers at beginning of stay.
• To account more accurately for the variability in patient costs over the
course of a stay, under PDPM, an adjustment factor is applied (for certain
components) and changes the per diem rate over the course of the stay.
– Similar to what exists under the Inpatient Psychiatric Facility (IPF) PPS
• For the PT, OT, and NTA components, the case-mix adjusted per diem rate
is multiplied against the variable per diem adjustment factor, following a
schedule of adjustments for each day of the patient’s stay.
35Variable Per Diem Adjustment Schedules
• PT & OT Components
Day in Stay Adjustment Factor Day in Stay Adjustment Factor
1-20 1.00 63-69 0.86
21-27 0.98 70-76 0.84
28-34 0.96 77-83 0.82
35-41 0.94 84-90 0.80
42-48 0.92 91-97 0.78
49-55 0.90 98-100 0.76
56-62 0.88
• NTA Component
Day in Stay Adjustment Factor
1-3 3.00
4-100 1.00
36Patient Classification Example
• Consider two patients with the following characteristics:
Patient Characteristics Patient A Patient B
Rehabilitation Received? Yes Yes
Therapy Minutes 730 730
Extensive Services No No
ADL Score 9 9
Clinical Category Acute Neurologic Major Joint Replacement
PT & OT Functional Score 10 10
Nursing Function Score 7 7
Cognitive Impairment Moderate Intact
Swallowing Disorder? No No
Mechanically Altered Diet? Yes No
SLP Comorbidity? No No
Comorbidities IV Medication and Diabetes Chronic Pancreatitis
Other Conditions Dialysis Septicemia
Depression? No Yes
37RUG-IV Classification
• Under the RUG-IV model, both patients would be classified into the same
payment group because they received the same number of therapy
minutes and received no extensive services, despite significant differences
between them.
38PDPM Classification: PT & OT Components
• Patient A (left) is classified into Acute Neurologic with PT and OT
Functional Score of 10; Patient B (right) is classified into Major Joint
Replacement/Spinal Surgery with a PT and OT Functional Score of 10.
39PDPM Classification: SLP Component
• Patient A (left) is classified into Acute Neurologic, has moderate cognitive
impairment, and is on a mechanically-altered diet; and Patient B (right) is
classified into non-neurologic with no SLP-classification related issue.
40PDPM Classification: NTA Component
• Patient A (left) has an NTA Comorbidity Score of 7 from IV medication (5
points) and diabetes mellitus (2 points); Patient B (right) has an NTA
Comorbidity Score of 1 from chronic pancreatitis (1 point).
41PDPM Classification: Nursing Component (1)
• Patient A is receiving dialysis services with a Nursing Function Score of 7
and is classified into LBC1.
Extensive
Extensive Services PDPM Nursing Function Score
Services?
Ventilator/ Infection 0-1 2-5 6-10 11-14 15-16
Tracheostomy
Respirator Isolation
ES3
Yes ES2
ES1
Other Conditions Depression?
Serious medical Yes HDE2 HBC2
conditions e.g.
comatose, septicemia, No HDE1 HBC1
respiratory therapy
Serious medical
Yes LDE2 LBC2
conditions e.g.
radiation therapy or
dialysis No LDE1 LBC1
Conditions requiring
complex medical care Yes CDE2 CBC2 CA2
No
such as pneumonia,
surgical wounds, burns No CDE1 CBC1 CA1
42PDPM Classification: Nursing Component (2)
• Patient B has septicemia and a Nursing Function Score of 7, exhibits signs
of depression, and is classified into HBC2.
Extensive
Extensive Services PDPM Nursing Function Score
Services?
Ventilator/ Infection 0-1 2-5 6-10 11-14 15-16
Tracheostomy
Respirator Isolation
ES3
Yes ES2
ES1
Other Conditions Depression?
Serious medical Yes HDE2 HBC2
conditions e.g.
comatose, septicemia, No HDE1 HBC1
respiratory therapy
Serious medical
Yes LDE2 LBC2
conditions e.g.
radiation therapy or
dialysis No LDE1 LBC1
Conditions requiring
complex medical care Yes CDE2 CBC2 CA2
No
such as pneumonia,
surgical wounds, burns No CDE1 CBC1 CA1
43Additional PDPM Policies
• In addition to the case-mix refinements, PDPM also includes policy
changes to the SNF PPS to be effective concurrent with implementation of
PDPM.
• The areas discussed in the next slides are:
– MDS Related Changes:
• MDS Assessment Schedule
• New MDS Item Sets
• New MDS Items
– Concurrent & Group Therapy Limit
– Interrupted Stay Policy
– Administrative Presumption
– Payment for Patients with AIDS
– Revised HIPPS Coding
– RUG-IV – PDPM Transition
44MDS Changes: Assessment Schedule
• Both RUG-IV and PDPM utilize the MDS 3.0 as the basis for patient
assessment and classification.
• The assessment schedule for RUG-IV includes both scheduled and
unscheduled assessments with a variety of rules governing timing,
interaction among assessments, combining assessments, etc.
– Frequent assessments are necessary, due to the focus of RUG-IV on
such highly variable characteristics as service utilization
• The assessment schedule under PDPM is significantly more streamlined
and simple to understand than the assessment schedule under RUG-IV.
• The changes to the assessment schedule under PDPM have no effect on
any OBRA-related assessment requirements.
45RUG-IV Assessment Schedule
• RUG-IV PPS Assessment Schedule
Scheduled Assessment
Medicare MDS Assessment Assessment Reference Applicable Standard Medicare
Assessment Schedule Type Reference Date Date Grace Days Payment Days
5-day Days 1-5 6-8 1 through 14
14-day Days 13-14 15-18 15 through 30
30-day Days 27-29 30-33 31 through 60
60-day Days 57-59 60-63 61 through 90
90-day Days 87-89 90-93 91 through 100
Unscheduled Assessment
Start of Therapy OMRA 5-7 days after start of therapy Date of the first day of therapy through the
end of the standard payment period
End of Therapy OMRA 1-3 days after end of therapy First non-therapy day through the end of the
standard payment period
The first day of the COT observation period
until end of standard payment period, or until
Change of Therapy OMRA Day 7 (last day) of COT observation
period interrupted by the next COT-OMRA
assessment or scheduled or unscheduled PPS
Assessment
Significant Change in No later than 14 significant change ARD of Assessment through the end of the
Status Assessment days after identified standard payment period
46PDPM Assessment Schedule
• PDPM Assessment Schedule
Medicare MDS Assessment Assessment Reference Date Applicable Standard
Schedule Type Medicare Payment Days
All covered Part A days until
Five-day Scheduled PPS Days 1-8
Assessment Part A discharge (unless an IPA
is completed)
ARD of the assessment
Interim Payment Assessment Optional Assessment through Part A discharge
(IPA) (unless another IPA
assessment is completed)
PPS Discharge: Equal to the
PPS Discharge Assessment End Date of the Most Recent N/A
Medicare Stay (A2400C) or
End Date
47MDS Changes: New Item Sets
• Interim Payment Assessment (IPA)
– Optional Assessment: May be completed by providers in order to
report a change in the patient’s PDPM classification
• Does not impact the variable per diem schedule
– ARD: Determined by the provider
– Payment Impact: Changes payment beginning on the ARD and
continues until the end of the Part A stay or until another IPA is
completed
• Optional State Assessment (OSA)
– Solely to be used by providers to report on Medicaid-covered stays,
per requirements set forth by their state
– Allows providers in states using RUG-III or RUG-IV models as the
basis for Medicaid payment to do so until September 30, 2020, at
which point CMS support for legacy payment models will end.
48MDS Changes: New & Revised Items (1)
• SNF Primary Diagnosis
– Item I0020B (New Item)
– This item is for providers to report, using an ICD-10-CM code, the
patient’s primary SNF diagnosis
– “What is the main reason this person is being admitted to the SNF?”
– Coded when I0020 is coded as any response 1 – 13
• Patient Surgical History
– Items J2100 – J5000 (New Items)
– These items are used to capture any major surgical procedures that
occurred during the inpatient hospital stay that immediately preceded
the SNF admission (i.e., the qualifying hospital stay)
– Similar to the active diagnoses captured in Section I, these Section J
items will be in the form of checkboxes
49MDS Changes: Patient Surgical Categories
Item Surgical Procedure Category Item Surgical Procedure Category
J2100 Recent Surgery Requiring Active SNF Care J2610 Neuro surgery - peripheral and autonomic nervous
system - open and percutaneous
J2300 Knee Replacement - partial or total J2620 Neuro surgery - insertion or removal of spinal and
brain neurostimulators, electrodes, catheters, and
CSF drainage devices
J2310 Hip Replacement - partial or total J2699 Neuro surgery - other
J2320 Ankle Replacement - partial or total J2700 Cardiopulmonary surgery - heart or major blood
vessels - open and percutaneous procedures
J2330 Shoulder Replacement - partial or total J2710 Cardiopulmonary surgery - respiratory system,
including lungs, bronchi, trachea, larynx, or vocal
cords - open and endoscopic
J2400 Spinal surgery - spinal cord or major spinal nerves J2799 Cardiopulmonary surgery - other
J2410 Spinal surgery - fusion of spinal bones J2800 Genitourinary surgery - male or female organs
J2420 Spinal surgery - lamina, discs, or facets J2810 Genitourinary surgery - kidneys, ureter, adrenals,
and bladder - open, laparoscopic
J2499 Spinal surgery - other J2899 Genitourinary surgery - other
J2500 Ortho surgery - repair fractures of shoulder or arm J2900 Major surgery - tendons, ligament, or muscles
J2510 Ortho surgery - repair fractures of pelvis, hip, leg, J2910 Major surgery - GI tract and abdominal contents
knee, or ankle from esophagus to anus, biliary tree, gall bladder,
liver, pancreas, spleen - open, laparoscopic
J2520 Ortho surgery - repair but not replace joints J2920 Major surgery - endocrine organs (such as thyroid,
parathyroid), neck, lymph nodes, and thymus - open
J2530 Ortho surgery - repair other bones J2930 Major surgery - breast
J2599 Ortho surgery - other J2940 Major surgery - deep ulcers, internal brachytherapy,
bone marrow, stem cell harvest/transplant
J2600 Neuro surgery - brain, surrounding tissue/blood J5000 Major surgery - other not listed above
vessels 50MDS Changes: New & Revised Items (2)
• Discharge Therapy Collection Items
– Items 0425A1 – O0425C5 (New Items)
– Using a look-back of the entire PPS stay, providers report, by each
discipline and mode of therapy, the amount of therapy (in minutes)
received by the patient
– If the total amount of group/concurrent minutes, combined, comprises
more than 25% of the total amount of therapy for that discipline, a
warning message is issued on the final validation report
• Section GG Functional Items – Interim Performance
– On the IPA, Section GG items will be derived from a new column “5”
which will capture the interim performance of the patient
– The look-back for this new column will be the three-day window
leading up to and including the ARD of the IPA (ARD and the 2
calendar days prior to the ARD)
51MDS Changes: New & Revised Items (3)
• Existing MDS Items Being Added to Swing Bed Assessment
– K0100: Swallowing Disorder
– I1300: Ulcerative Colitis or Crohn’s Disease or Inflammatory Bowel
Disease
– I4300: Active Diagnosis: Aphasia
– O0100D2: Special Treatments, Procedures & Programs: Suctioning,
While a Resident
• Existing Items Being Added to 5-day PPS Assessment and IPA
– I1300: Ulcerative Colitis or Crohn’s Disease or Inflammatory Bowel
Disease
52Concurrent & Group Therapy Limit
• Under RUG-IV, no more than 25% of the therapy services delivered to
SNF patients, for each discipline, may be provided in a group therapy
setting, while there is no limit on concurrent therapy.
• Definitions:
– Concurrent Therapy: One therapist with two patients doing different
activities
– Group Therapy: One therapist with four patients doing the same or
similar activities
• Under PDPM, we use a combined limit both concurrent and group therapy
to be no more than 25% of the therapy received by SNF patients, for each
therapy discipline.
53Concurrent & Group Limit: Compliance
• Compliance with the concurrent/group therapy limit will be monitored by
new items on the PPS Discharge Assessment (O0425).
– Providers will report the number of minutes, per mode and per
discipline, for the entirety of the PPS stay
– If the total number of concurrent and group minutes, combined,
comprises more than 25% of the total therapy minutes provided to the
patient, for any therapy discipline, then the provider will receive a
warning message on their final validation report
• How to calculate compliance with the concurrent/group therapy limit.
– Step 1: Total Therapy Minutes, by discipline
(O0425X1 + O0425X2 + O0425X3)
– Step 2: Total Concurrent and Group Therapy Minutes, by discipline
(O0425X2 + O0425X3)
– Step 3: C/G Ratio (Step 2 Result / Step 1 Result)
– Step 4: If Step 3 Result is greater than 0.25, then non-compliant
54Concurrent & Group Limit: Example 1
• Example 1
– Total PT Individual Minutes (O0425C1): 2,000
– Total PT Concurrent Minutes (O0425C2): 600
– Total PT Group Minutes (O0425C3): 1,000
• Does this comply with the concurrent/group therapy limit?
– Step 1: Total PT Minutes (O0425C1 + O0425C2 + O0425C3): 3,600
– Step 2: Total PT Concurrent and Group Therapy Minutes (O0425C2 +
O0425C3): 1,600
– Step 3: C/G Ratio (Step 2 Result / Step 1 Result): 0.44
– Step 4: 0.44 is greater than 0.25, therefore this is non-compliant
55Concurrent & Group Limit: Example 2
• Example 2
– Total SLP Individual Minutes (O0425C1): 1,200
– Total SLP Concurrent Minutes (O0425C2): 100
– Total SLP Group Minutes (O0425C3): 200
• Does this comply with the concurrent/group therapy limit?
– Step 1: Total SLP Minutes (O0425C1 + O0425C2 + O0425C3): 1,500
– Step 2: Total PT Concurrent and Group Therapy Minutes (O0425C2 +
O0425C3): 300
– Step 3: C/G Ratio (Step 2 Result / Step 1 Result): 0.20
– Step 4: 0.20 is not greater than 0.25, therefore this is compliant
56Interrupted Stay Policy: Background
• Given the introduction, under PDPM, of the variable per diem adjustment,
there is a potential incentive for providers to discharge SNF patients from
a covered Part A stay and then readmit the patient in order to reset the
variable per diem schedule.
• Frequent patient readmissions and transfers represents a significant risk
to patient care, as well as a potential administrative burden on providers
from having to complete new patient assessments for each readmission.
• To mitigate this potential incentive, PDPM includes an interrupted stay
policy, which would combine multiple SNF stays into a single stay in cases
where the patient’s discharge and readmission occurs within a prescribed
window.
– This type of policy also exists in other post-acute care settings (e.g.,
Inpatient Rehabilitation Facility (IRF) PPS).
57Interrupted Stay Policy
• If a patient is discharged from a SNF and readmitted to the same SNF no
more than 3 consecutive calendar days after discharge, then the
subsequent stay is considered a continuation of the previous stay.
– Assessment schedule continues from the point just prior to discharge
– Variable per diem schedule continues from the point just prior to
discharge
• If patient is discharged from SNF and readmitted more than 3 consecutive
calendar days after discharge, or admitted to a different SNF, then the
subsequent stay is considered a new stay.
– Assessment schedule and variable per diem schedule reset to day 1
58Interrupted Stay Policy: Examples
• Example 1: Patient A is admitted to SNF on 11/07/19, admitted to hospital
on 11/20/19, and returns to same SNF on 11/25/19
– New stay
– Assessment Schedule: Reset; stay begins with new 5-day assessment
– Variable Per Diem: Reset: stay begins on Day 1 of VPD Schedule
• Example 2: Patient B is admitted to SNF on 11/07/19, admitted to hospital
on 11/20/19, and admitted to different SNF on 11/22/19
– New stay
– Assessment Schedule: Reset; stay begins with new 5-day assessment
– Variable Per Diem: Reset; stay begins on Day 1 of VPD Schedule
• Example 3: Patient C is admitted to SNF on 11/07/19, admitted to hospital
on 11/20/19, and returns to same SNF on 11/22/19
– Continuation of previous stay
– Assessment Schedule: No PPS assessments required, IPA optional
– Variable Per Diem: Continues from Day 14 (Day of Discharge)
59Administrative Presumption: Background
• The SNF PPS includes an administrative presumption in which a
beneficiary who is correctly assigned one of the designated, more
intensive case-mix classifiers on the 5-day PPS assessment is
automatically classified as requiring an SNF level of care through the
assessment reference date for that assessment.
• Those beneficiaries not assigned one of the designated classifiers are not
automatically classified as either meeting or not meeting the level of care
definition, but instead receive an individual determination using the
existing administrative criteria.
60Administrative Presumption: Classifiers
• The following PDPM classifiers are designated under the presumption:
– Those nursing groups encompassed by the Extensive Services,
Special Care High, Special Care Low, and Clinically Complex nursing
categories;
– PT & OT groups TA, TB, TC, TD, TE, TF, TG, TJ, TK, TN, and TO;
– SLP groups SC, SE, SF, SH, SI, SJ, SK, and SL; and
– The NTA component’s uppermost (12+) comorbidity group
61RUG-IV Payment for SNF Patients with AIDS
• Under RUG-IV, patients with AIDS receive 128% increase in the per diem
rate associated with their RUG-IV classification.
• This add-on was merely a general approximation of the added cost of
caring for patients with AIDS, which was not accurately targeted at the
specific rate components that actually account for the disparity in cost
between those patients and others.
– Two primary cost components that drive increased cost for this
subpopulation are Nursing and NTA costs
– Under RUG-IV, given most patients are classified into a therapy group
and criteria used to classify patients into therapy groups, increased
therapy utilization also increased impact of the AIDS add-on, contrary
to research indicating that AIDS is actually associated with a
statistically significant decrease in per diem therapy costs
62PDPM Payment for SNF Patients with AIDS
• As the PDPM was developed, its rate components were specifically
designed to account accurately and appropriately for the increased cost of
AIDS-related care, as determined through our research.
• Accordingly, the PDPM addresses costs for this subpopulation in two
ways.
– Assigns those patients with AIDS the highest point value (8 points) of
any condition or service for purposes of classification under its NTA
component
– 18% add-on to the PDPM Nursing component
• As under the previous RUG-IV model, the presence of an AIDS diagnosis
continues to be identified through the SNF’s entry of ICD-10-CM Code
B20 on the SNF claim.
63PDPM HIPPS Coding
• Based on responses on the MDS, patients are classified into payment
groups, which are billed using a 5-character Health Insurance Prospective
Payment System (HIPPS) code.
• The current RUG-IV HIPPS code follows a prescribed algorithm.
– Character 1-3: RUG Code
– Character 4-5: Assessment Indicator
• In order to accommodate the new payment groups, the PDPM HIPPS
algorithm is revised as follows:
– Character 1: PT/OT Payment Group
– Character 2: SLP Payment Group
– Character 3: NTA Payment Group
– Character 4: Nursing Payment Group
– Character 5: Assessment Indicator
64PDPM HIPPS Coding Crosswalk: PT, OT, NTA
• PT/OT, SLP, NTA Payment Groups to HIPPS Translation
PT/OT SLP NTA HIPPS
Payment Group Payment Group Payment Group Character
TA SA NA A
TB SB NB B
TC SC NC C
TD SD ND D
TE SE NE E
TF SF NF F
TG SG G
TH SH H
TI SI I
TJ SJ J
TK SK K
TL SL L
TM M
TN N
TO O
TP P
65PDPM HIPPS Coding Crosswalk: Nursing
• Nursing Payment Group to HIPPS Translation
Nursing HIPPS Nursing HIPPS
Payment Group Character Payment Group Character
ES3 A CBC2 N
ES2 B CA2 O
ES1 C CBC1 P
HDE2 D CA1 Q
HDE1 E BAB2 R
HBC2 F BAB1 S
HBC1 G PDE2 T
LDE2 H PDE1 U
LDE1 I PBC2 V
LBC2 J PA2 W
LBC1 K PBC1 X
CDE2 L PA1 Y
CDE1 M
66PDPM HIPPS Coding Crosswalk: AI
• Assessment Indicator (AI) Crosswalk
HIPPS Character Assessment Type
0 IPA
1 PPS 5-day
6 OBRA Assessment (not coded as a PPS Assessment)
67PDPM HIPPS Coding: Examples
• Example 1:
– PT/OT Payment Group: TN
– SLP Payment Group: SH
– NTA Payment Group: NC
– Nursing Payment Group: CBC2
– Assessment Type: 5-day PPS Assessment
– HIPPS Code: NHCN1
• Example 2:
– PT/OT Payment Group: TC
– SLP Payment Group: SD
– NTA Payment Group: NE
– Nursing Payment Group: PBC1
– Assessment Type: 5-day PPS Assessment
– HIPPS Code:CDEX1
68RUG-IV & PDPM Transition
• As discussed in the FY 2019 SNF PPS Final Rule, there is no transition
period between RUG-IV and PDPM, given that running both systems at
the same time would be administratively infeasible for providers and CMS.
– RUG-IV billing ends September 30, 2019
– PDPM billing begins October 1, 2019
• To receive a PDPM HIPPS code that can be used for billing beginning
October 1, 2019, all providers will be required to complete an IPA with an
ARD no later than October 7, 2019 for all SNF Part A patients.
– October 1, 2019 will be considered Day 1 of the VPD schedule under
PDPM, even if the patient began their stay prior to October 1, 2019.
– Any “transitional IPAs” with an ARD after October 7, 2019 will be
considered late and relevant penalty for late assessments would apply
69Medicaid Related Issues: UPL
• PDPM may have a number of effects on Medicaid programs.
– Upper Payment Limit (UPL) Calculation
– Case-mix Determinations
• UPL represents a limit on certain reimbursements for Medicaid providers.
– Specifically, the UPL is the maximum a given State Medicaid program
may pay a type of provider, in the aggregate, statewide in Medicaid
fee-for-service (FFS)
– State Medicaid programs cannot claim federal matching dollars for
provider payments in excess of the applicable UPL
• While budget neutral in the aggregate, PDPM changes how payment is
made for SNF services, which can have an impact on UPL calculations.
– States will need to evaluate this effect to understand revisions in their
UPL calculations
70Medicaid Related Issues: Case-Mix
• For purposes of Medicaid reimbursement, states utilize a myriad of
different payment methodologies to determine payment for NF patients.
– Some states use a version of the RUG-III or RUG-IV models as the
basis for patient classification and case-mix determinations
• With PDPM implementation, CMS will continue to report RUG-III and
RUG-IV HIPPS codes, based on state requirements, in Item Z0200,
through 9/30/2020.
• Case-mix states also may rely on PPS assessments to capture changes in
patient case-mix, including scheduled and unscheduled assessments.
– As of October 1, 2019, all scheduled PPS assessments (except the 5-
day) and all current unscheduled PPS assessments will be retired
– To fill this gap in assessments, CMS will introduce the Optional State
Assessment (OSA), which may be required by states for NFs to report
changes in patient status, consistent with their case-mix rules
71Resources
• PDPM website: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/SNFPPS/PDPM.html
• For questions related to PDPM implementation and policy:
– PDPM@cms.hhs.gov
• For questions related to the OSA:
– OSAMedicaidinfo@cms.hhs.gov
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